Startups and technology companies from Israel are beginning to break into the stock markets of London and New York as the profitability of Israel’s technology sector becomes noticeable to North American and European investors. The latest company to be rumored to be undertaking a Wall Street stock offering is Outbrain, a sometimes controversial startup producing software that links Website content to suggested Sites and advertisers.
Israeli Companies Arrive on Wall Street and London Markets
Outbrain is just the latest in a long line of Israeli companies from the technology industries who have recently been exploring the possibility of raising large sums of investment with an IPO offering. One of the first to successfully float their services on Wall Street was MediWound, a biotechnology startup who successfully launched in New York in April 2014. MediWound followed the launch of Borderfree, a retail support specialist that was founded by US and Israeli talent.
Throughout 2013 the rumored launch of Outbrain on the New York financial markets was rumored, but seemed to have been halted by the large investment by a number of venture capital companies towards the end of the year. Since its launch in 2006, Outbrain has been at the forefront of venture capital investment with more than $99 million estimated to have been sourced from this source of funding. Venture capital funding has grown in popularity since the 2008 economic downturn as the high profile failures of a number of technology based giants to make significant ground on the markets has led to a fear of failure amongst investors. The most common approach now taken sees a company seek venture capital investment to see the company established before a stock market offering is made.
When finding an additional $35 million in venture capital investment funding in the Fall of 2013, Outbrain was estimated to have a value of around $350. This value has jumped significantly in the latter portion of 2013 and first quarter of 2014 to an estimated $1 billion, largely based on sales of around $100 million in 2013. Underwriters Goldman Sachs and J P Morgan have been employed to handle the Wall Street offering of Outbrain, with both underwriters hoping to avoid the problems seen by the over-valuation of the Facebook stock offering. Many commentators have raised their concerns over Outbrain’s software, which many claim is confusing with regards to the line between advertising and editorial content offered through many Websites.